10 Questions
What role does pricing play in the economy?
Prices regulate production, distribution, and consumption in the economy.
How does competition on price impact firms?
Competition on price weeds out inefficient firms and compels the remaining ones to maximize efficiency.
What factors influence pricing decisions?
Pricing decisions require intelligent judgement on market conditions, customer relations, and up-to-date knowledge of trends in sales and demand.
Why has the significance of pricing in the marketing mix increased?
The significance of pricing in the marketing mix has increased due to growing competition, declining product life cycles, consumer sensitivity to prices, rising distribution channel power, recession, and demand for labor-intensive services.
How do prices impact the allocation of resources?
Prices influence the allocation of resources by signaling the relative scarcity and value of goods and services.
What challenges are associated with pricing decisions?
Pricing decisions are challenging due to the consideration of several intangible and supply factors, requiring sound judgement on market conditions and customer relations.
How do prices impact the level of employment in the country?
Prices influence the level of employment by affecting the demand for labor in different sectors of the economy.
What is the role of pricing in weeding out inefficient firms?
Competition on price helps weed out inefficient firms by forcing them to improve efficiency or risk being priced out of the market.
How do prices influence the bargaining power of distribution channels?
Prices impact the bargaining power of distribution channels by affecting the margins and profitability of intermediaries.
Why is pricing considered a difficult function in marketing?
Pricing is considered a difficult function in marketing because it involves the consideration of various intangible and supply factors, requiring intelligent judgement and knowledge of market conditions.
Learn about the objectives that business firms seek to achieve while setting prices for their products, such as volume-oriented objectives and market-oriented objectives. Understanding these objectives can help businesses make strategic pricing decisions.
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